There are any number of interesting things that Bill McKibben has to say in his “All Programs Considered” piece for the latest issue of The New York Review. The most interesting one for me, however, was a quote from someone else. That someone was Torey Malatia, the program director for WBEZ in Chicago. This is the quote:
But you can budget for a certain amount of risk, and to recover from that risk. The audience is forgiving of that, I think—maybe even admires it.
As far as I am concerned, this goes far beyond making bold decisions about what to put on the air. Indeed, it may be one of the smartest observations about our economic crisis.
Investment is, after all, a risky business. Risk is the very nature of the beast. If you do not want to take risks, you shouldn’t be in the game in the first place. The significance of Malatia’s sentence lies in the second part of his conjunction: Having realistic plans for how to recover from a risk that goes south is more important than wholesale avoidance of risk. In another world financial advisors who would deliberately steer clients away from making such plans would be accused of malpractice.
Furthermore, the precept as a whole goes beyond making risky investments. It is also a realistic reply to those who insist that we be perfectly secure against terrorist attacks. This is even more unrealistic that insisting that all investments be totally risk-free. As I put it almost a year ago, you can never prevent the possibility that something will go wrong, whether at the hands of one or more terrorists or through an “act of God” (in the technical terminology of the insurance business). However, you can at least try to assess how well-equipped you are to recover when things go wrong and then take that assessment seriously if it indicates where your resources are lacking. Malatia’s wisdom thus extends far beyond the media business, and his words should be weighed in that broader framework.